African low-cost carrier Fastjet, tired of waiting on its planned acquisition 1time, is instead planning to launch services in South Africa May 31 in cooperation with South African investment company Blockbuster.
Fastjet originally planned to acquire failed South African carrier 1time to support its South African launch, but said 1time’s value has diminished over time and there is still no indication that 1time’s creditors will accept its offer.
It has therefore inked a memorandum of understanding (MOU) with Blockbuster, paving the way for the creation of an “entity,” which is 75%-owned by Blockbuster and 25%-owned by Fastjet. Blockbuster has in turn sealed a commercial agreement with local operator Federal Airlines, which will provide an airline platform for the venture.
Fastjet has also secured commitments for an additional £2 million ($18.3 million) in working capital to help support its expansion.
“Though we have been in talks with a number of companies regarding licensing arrangements, we have ultimately decided that in order to best serve South African customers, we should invest not in the past, but in the future,” Fastjet CEO Ed Winter said.
Tickets could go on sale within a few weeks and Fastjet is targeting May 31 to launch twice-daily services between Johannesburg and Cape Town. “Flights to other key destinations will be launched once the Cape Town route is established,” Fastjet chairman David Lenigas said.
“The signing of this MOU provides a positive platform for Fastjet to strengthen its East African hub. Both Fastjet and Don Smith are pleased to be putting the unfortunate, highly publicized events of the past few months behind us. Smith remains the CEO of the Kenyan business and we are pleased to have him as part of the Fastjet/Fly540 team,” Winter said.